Obamacare's Accountable Medicare Effort Surpasses Goals, Critics

Bruce Japsen
, ContributorI write about healthcare business and policyOpinions expressed by Forbes Contributors are their own.

U.S. Secretary of Health and Human Services Kathleen Sebelius said nearly 90 more groups of medical care providers will participate in Medicare's Accountable Care Organization initiative, which encourages doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare. In this picture, she announced last December the first 32 participants in the ACO effort, which could save nearly $1 billion over five years. (Image credit: Getty Images via @daylife)

A new health care delivery system that rewards doctors and hospitals for working together to improve quality is surpassing early goals in the Medicare health insurance program for the elderly.

The Obama administration said today that the voluntary program has attracted 89 new groups of medical care providers known as Accountable Care Organizations (ACOs), an umbrella that links medical care providers to improve quality.

If the providers in the ACO achieve better outcomes, they divvy up money saved with the Medicare program. That brings to 154 the number of ACOs that have signed on to participate in the so-called “Medicare Shared Savings Program,” an initiative under the Affordable Care Act that was signed into law two years ago by President Obama and upheld two weeks ago by the Supreme Court.

More than 2.4 million Medicare beneficiaries will be receiving care from these ACOs, according to an announcement this morning by the Centers for Medicare & Medicaid Services, which runs the Medicare program. The figures released today are in sharp contrast to administration concerns in the last year when some medical groups doubted the effort and whether it would reach 2 million beneficiaries in the first year.

“This new group of ACOs adds to a solid foundation,” Marilyn Tavenner, Centers for Medicare & Medicaid Services Acting Administrator said. “The Medicare ACO program opened for business in January, and already, more than 2.4 million beneficiaries are receiving care from providers participating in these important initiatives.”

Additional ACOs can still sign up later this year.

The ACO wave is also attracting providers in the private sector where most private insurers like those operated by Aetna Inc. (AET), UnitedHealth Group (AET), Humana Inc. (HUM) and many Blue Cross plans are lining up with ACOs to care for more patients.

The government-led program works with Medicare contracting with doctors and hospitals through an ACO which, in turn, pushes high quality, less expensive care rather than today’s payment system that often leads to excessive care by paying for each treatment or procedure that isn’t always better. The providers in an ACO are responsible for managing the care of the health plan enrollees and are financially rewarded if the enrollees, or patients, stay out of the more expensive hospital.

The Medicare ACO program has come a long way. Physicians were not convinced there would be participation and some doctor groups were leery about having to meet all of the quality measures.